Telecommunications is among the top industries experiencing disruption with companies investing billions in 5G network infrastructure, with its promise of unprecedented speed, connectivity and low latency.
Artificial Intelligence (AI) has become vastly more accessible to users without a data science background.
The volume of data produced is growing, as more telecom providers offer unlimited plans and channels continue to multiply.
At the same time, customers are demanding the simple and personalized journeys they’ve grown accustomed to from leading digital brands. Incumbents and challengers alike are being forced to adapt to these demands or risk competition from emerging players.
All in all, Communications Service Providers (CSPs) are facing a 'Perfect Storm' of transformation and here are the top three trends I see upending the industry in 2020.
5G will fuel innovative services and business models
As the expansion of 5G accelerates, this technology will be one of the most significant catalysts of change in the telecom industry. 5G services have already launched in the US, South Korea, and several European countries, while many others plan to follow suit in 2020. By the end of the year, Gartner predicts that 5G network revenue will nearly double to $4.2 billion.
We know that 5G brings dramatically higher bandwidth, lower latency and greater connectivity. Much of the conversation so far has focused on how enhanced mobile broadband and fixed wireless access will transform things like video streaming, gaming, and virtual and augmented reality. But the reality is that few 5G-compliant devices exist on the market today, and consumers are unlikely to pay much more to access the new network. Service providers who will have collectively spent billions on network infrastructure will need to find other ways to monetize their investments.
To effectively monetize, CSPs will need to look to build partnerships across industries and offer platforms to launch innovative new services on their networks. CSP’s need to create B2B2X business models around industries like smart manufacturing, agriculture, telematics, fleet management, healthcare and more. For example, telecom companies are already partnering with car makers to produce vehicles equipped with sensors that can capture driving behavior, allowing customers to potentially influence car insurance premiums. This kind of use case will only become more mainstream moving forward.
Some CSPs have already explored innovative collaborations on existing networks — like Verizon’s partnerships with GM and Audi — but 5G will take these to the next level. 5G will increase connection density by a factor of 10, and improve traffic capacity and network efficiency by a factor of 100. At the same time, the ability to provide wireless access without a room full of wires and cables will allow the network to penetrate previously unconnected places. The vast increase in connected devices, and the volume of data being shared, will allow for new models of connectivity in arenas like agriculture, manufacturing, airports, and Internet of Things (IoT) devices. Some of these 5G partnerships are already here. For example, Vodafone is partnering with Hatch to offer cloud gaming on 5G to mobile subscribers, and Telia and Finavia have dispatched security robots at Helsinki Airport that transmit real-time video via 5G. Partnerships like these will be key to monetizing investments in 5G.
As new services and partnerships blossom, managing customer interactions will become a priority for CSPs. According to a recent survey, CSPs believe that realizing 72% of potential revenue growth from 5G depends on revamping their existing operations support and business support systems. The changes in the business operation systems also include how CSP’s go to market and sell the services. In the domain of Enterprise sales, the sales cycles in traditional businesses have been CSP’s selling connectivity services to an enterprise customer. However, in the realm of 5G, these cycles will evolve from pure selling to also include selling with cycles - where these enterprise customers would also be partners for joint go to market bundles and services. These B2B2X arrangements will drive different contractual and partnership models between the CSP and these enterprises and will need to have processes that support them.
AI will become a mainstream strategy
AI tools will play a big role in helping CSPs make the most of 5G from the get-go. Since consumers are unlikely to pay more money to use the network, the rollout must be as intelligence-driven and efficient as possible. AI insights can shape everything from where to build cell towers to how to deflect network traffic based on demand to addressing hiccups as they come up.
AI’s role will continue to evolve on the marketing and service side, as well. In recent years, there has been an explosion of assisted and unassisted channels enabling customers to engage with their service providers. As 5G advances and partnerships across industries take center stage, customers will have legions of services and connected devices to choose from, and the volume of interactions will explode. To reduce the cost of acquisition and improve customer experience, it is pivotal for service providers to avoid inundating the customer or agent with all options; instead, they need to recommend the most relevant service on the right channel at the right time. For example, proposing add-ons like streaming media services based on interaction behavior and personal preferences.
AI will also power proactive, personalized customer service. As more and more devices and channels get connected, it will become that much more difficult for agents to process the raw data. AI can make sense of the signals coming from the network and other data sources to predict the reason for the interaction and recommend the next best action. Voice assistance leveraging AI and neuro-linguistic programming will also become a key channel of engagement. Service providers will need to leverage voice analytics to help guide them into actionable insights for the customer. Overall, this will lead to faster service, reduced churn, and improved customer satisfaction. While AI has been proliferating in the telecom space, it will need to become a mainstream strategy for CSPs moving forward.
Digital natives will remold the industry
Consumers today are already demanding an experience on par with Apple or Amazon, challenging the way CSPs traditionally operate. Looking into the future, 1.4 billion mobile users — 15% of mobile connections — will be using 5G by 2025. The next generation of digital natives will know nothing else other than real-time connectivity and ultra-low latency. They will demand even more simplified, frictionless customer engagements — a finite number of options to choose from and the ability to reach anyone wherever and whenever they want to. Historically, CSPs have lagged behind the kind of engagement now prevalent among retailers, limited in part by an infrastructure built around call centers and stores. Now, they have to adapt by having scalable platforms in the background to support the agility digital natives desire across every channel.
Some incumbents have responded by spinning off brands to attract digital natives. For example, in 2018 Verizon launched Visible, an all-digital carrier offering all-inclusive, unlimited plans for a flat, affordable fee. Internationally based incumbents have also launched similar, fully digital strategies, including Orange Flex in Poland, GoMo in Singapore, and by.U in Indonesia. All of these startups were built with the mindset of providing a simplified, agile, mobile-first experience. In other markets, brand new entrants are challenging the status quo. For CSPs to remain relevant, all need to adopt a digital-first strategy for customer engagement and drive as much of their traffic as possible into the hands of the customer using digital self-service channels.
The potential of the 'Perfect Storm'
With the rollout of 5G networks, advances in AI and the growing importance of customer experience, the telecom industry is undergoing massive change. But periods of disruption are also moments of possibility. As business models evolve and partnerships open up across multiple industries, service providers have a real opportunity to move up the relationship ladder with their customers to become a trusted partner in digital services.